What happens when private equity buys homes in your neighborhood
a day ago
- #private-equity
- #housing-market
- #urban-development
- Daniel Erb and his cousin started buying single-family homes to rent out after noticing a decade of underinvestment in new housing starts in the U.S.
- Private equity firms like Blackstone pioneered the buy-to-rent strategy, purchasing foreclosed homes en masse after the Great Recession with government support.
- Institutional investors have made homeownership more expensive but also increased neighborhood diversity by providing rental options to lower-income and nonwhite families.
- Research shows that corporate landlords reduce segregation but also push home prices up, creating a trade-off between affordability for renters and aspiring homeowners.
- Institutional investors own a small fraction of single-family homes (2%-25% in major markets), with most purchases by mom-and-pop landlords.
- Economists argue that the root issue is insufficient housing supply, not corporate landlords, and advocate for zoning reforms to encourage more construction.